Tuesday, 12 June 2012

Tax powers, not yet.

Tax and stimulating the Welsh economy dominated the Assembly’s discussions today. It all kicked off in a press briefing given by Jane Hutt when she was asked what progress was being made in discussions with Treasury on the issues of “fair funding” for Wales (the Barnett formula to you and me) and the power to borrow.

Well her answer was much the same as her reply last time “discussions still continue.” Put in terms that the polite Jane Hutt would never dream of saying the Treasury are dragging their feet on the issues.

Of course the won’t want to change Barnett this side of a Scottish referendum. Why? Because the Scots do very nicely out of it.

Any change that might address the underfunding of Wales would have to address the massive bung being given to the Scots.

This bribe will surely feature very heavily in the Unionists case for Scotland staying within the Union. So sorry Jane you’ll be left dragging your feet awhile yet.

There is a knock on effect to "no change." Carwyn Jones has made it absolutely clear he’ll make no demands for more powers on taxation until Treasury gives him what he wants on “fair funding.”

So despite the grafting away on these issues by the Silk Commission nothing will happen until Carwyn gets his way.

Indeed proof of Carwyn Jones’s attitude to taxation powers came when responding to questions from the leader of Plaid Cymru Leanne Wood, the First Minister denied that tax-varying powers could help deliver the economy out of recession.

Whether you accept Plaid Cymru’s case or not that the “ability to vary taxes would offer a real incentive for the government to bring about change to the economy and to finally take action to help Wales’ struggling economy.” It is clear that Carwyn Jones ain’t going to budge, until HM Treasury move. And they won’t budge until Mr Salmond holds his referendum.

So blame it on those pesky Scots, Leanne.

Meanwhile, another call for devolution was presented to the government by economist Professor Brian Morgan.

The Welsh government asked Professor Morgan to look at how the complex regime of business rates could be reformed to help the economy. “Surprise, surprise,” as Cilla Black would say, Morgan’s main conclusion “Full control over business rates should be passed to the Welsh government as a way to boost the economy.”

And Enterprise Minister Edwina Hart’s response “I’ll study the report carefully.” That’s government speak for “this is a hot potato so I’ll put it into the pending tray awhile yet.”